Regulatory Concepts in the News, Part I: FDA Efficacy Standards for Old Drugs

By Patrick O’Leary

While reading some of the great articles from the health section of the New York Times over the holidays it struck me that such articles, in their need to be concise and accessible, often give only passing treatment to regulatory concepts that can be fundamental to the story. Accordingly, I thought it might be useful to write a series of posts digging down a bit deeper into some of the regulatory foundations of health stories that percolate up to public attention through the news. In this post I’ll begin by looking at an interesting point relating to drug efficacy standards raised by an article about a newly expensive (but decades-old) drug.

In Andrew Pollack’s “Questcor Finds Profits, at $28,000 a Vial” we read that a drug called Acthar, first approved by the FDA in 1952 and used primarily to treat rare infantile spasms, has in recent years become a very expensive and (for it’s maker) lucrative treatment for conditions ranging from multiple sclerosis to rheumatologic conditions. The article is worth a read for its thoughtful discussion of drug pricing, but it also makes passing reference to a some important regulatory concepts that bear further examination. One issue that particularly stood out to me was Pollack’s statement that Questcor, Acthar’s manufacturer, has been able to market the drug for a variety of uses “without being required to prove that the drug actually works” because it was “essentially grandfathered” into an anachronistic efficacy standard by being “approved for use in 1952, before the [FDA] required clinical trials . . . .” On first read, that sounds fairly alarming, so I thought it might be worthwhile to unpack the law around such “grandfathered” drugs a little. While it is true that FDA did not require proof of effectiveness for new drugs until lawmakers included this requirement in the Drug Amendments of 1962, it isn’t the case that pre-1962 drugs simply get a free pass on proving effectiveness. The truth, as one might expect, is somewhat more complicated.

In the period following the passage of the Food, Drug, and Cosmetic Act (FDCA) in 1938 (prompted by the Elixir Sulfanilamide scandal) but before the passage of the Drug Amendments of 1962 (prompted by the Thalidomide scandal), sponsors of new drug applications (NDAs) had  to prove their products’ safety but not their effectiveness. Thus, when the 1962 amendments came into effect, there were thousands of drugs on the market whose effectiveness was suspect or altogether unknown. The drafters of the Drug Amendments were aware of this and addressed it in the legislation: §102(e) of the legislation amended FDCA §505(e) to require the FDA to withdraw prior approval of a drug if it found: “on the basis of new information before [it] with respect to such drug, evaluated together with the evidence available to [it] when the application was approved, that there is a lack of substantial evidence that the drug will have the effect it purports or is represented to have . . . .”

To implement this mandate, the agency undertook a full review of all NDAs approved from 1938-1962. This process, called the Drug Efficacy Study Implementation (DESI) review, began in 1966 in collaboration with the National Academy of Sciences/National Research Council (NAS-NRC). See 31 Fed. Reg. 9425 (Jul. 9, 1966). While DESI review has been a long, slow process (it continues to this day, half a century later), the majority of 1938-1962 NDAs have been reviewed over the years, including Acthar.

Indeed, Acthar, which was first approved under an NDA in 1952, completed DESI review in 1977 and was found effective for a wide range of indicated uses. See 42 Fed. Reg. 11,891 (Mar. 1, 1977); 42 Fed. Reg. 27,298 (May 27, 1977). A DESI final determination of effectiveness, combined with an appropriate supplement to the NDA to bring the drug’s labeling into accord with the DESI findings, allows a drug’s continued legal marketing. See FDA Compliance Policy Guide Sec. 440.100. In Acthar’s case, such supplements were routinely filed for the DESI-approved indications, as the drug’s history on Drugs@FDA reflects. While the standards for proof-of-efficacy have changed since the 1970s (compare the modern regulation defining “adequate and well-controlled studies,” 21 C.F.R. §314.126, with the 1970 version, 35 Fed. Reg. 7,250 (May 8, 1970)), FDA was already quite clear in 1970 that “drugs introduced before 1962 shall meet the same standards of proof of effectiveness by substantial evidence as are applicable to newly developed drugs.” Id. In other words, the final determination of effectiveness for Acthar under DESI in 1977 signaled that the drug satisfied the same standard of effectiveness as the agency would apply to new drugs at that time.

In the case of Acthar, the FDA’s determination of effectiveness in 1977 was not the last word on the matter. That’s because after acquiring the drug in 2001, Questcor immediately set about applying for FDA approval for treatment of infantile spasms, an indication that was still off-label at that time despite decades of widespread use. After a false start in 2006-2007, Questcor won approval of its supplemental NDA (sNDA) for the infantile-spasms indication in 2010. This approval is important to Questcor largely because it came with an orphan-drug designation and seven years of market exclusivity. Because generic forms of the drug are thus barred despite the lack of patent protection, Questcor has been able to charge a premium for the drug. The new approval is important for thinking about the older DESI indications, as well, since in reviewing the application for the new use, the agency also revisited the old indications. As the public record reflects, FDA’s Division of Metabolism and Endocrinology Products (DMEP), which has jurisdiction over the drug’s non-neurological applications, conducted a review of the drug’s physician labeling as part of the sNDA review. Between DMEP’s review of the labeling for non-neurological uses and the Division of Neurology Products (DNP) review of the infantile spasm and multiple sclerosis indications, the end result of approving one new indication for the drug was a label with only 19 approved indications, down from over 50 before the sNDA application.

Where does that leave us on the question of grandfathered drugs and the efficacy requirement? In short, the world’s not quite as scary as Pollack’s article might at first have made it seem. While it is true that drugs approved before 1962 weren’t subject to an efficacy requirement, the statutes and regulations on the books today make clear that modern efficacy standards apply to all prescription drugs regardless of when they were first approved, and require the FDA to enforce this mandate. That’s not to say that all pre-1962 drugs on the market would necessarily pass muster if submitted as a new drug in 2013, but the same could be said of many drugs approved in the years and decades after 1962. The problem, if one exists, is not that the legal standard applied to older drugs was particularly more relaxed. In any case, the problem is largely theoretical: market forces over the last 50 years have presumably weeded out most of the pre-1962 drugs without real therapeutic potential, particularly as expiring patents severely limit the potential profitability of making and selling such drugs. In this sense, Acthar may be the case in point: for the older DESI indications that are unprotected by orphan-drug exclusivity, either there will turn out to be real therapeutic value (in which case generics will enter the market and prices will have to fall) or there won’t, in which case insurers will refuse to pay the high sticker price except for treating infantile spasms.

Finally, in the interest of completeness, it is worth noting that despite Pollack’s choice of words, Acthar isn’t technically a “grandfathered” drug in the statutory sense. When Congress passed the 1962 amendments, it did include a grandfather clause–§107(c)(4) of that act–that purported to exempt certain pre-1962 drugs from the new effectiveness requirements. Though this category theoretically exists, FDA has made clear that it considers it an empty set in practice: “[T]he Agency believes it is not likely that any currently marketed prescription drug product is grandfathered or is otherwise not a new drug.” FDA Compliance Policy Guide §440.100.

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